3 June 2024

• Three-year, projected multi-billion-dollar strategic partnership will focus on creating innovative industry solutions that deliver transformative outcomes for businesses and society.
• Hitachi Group will embed the Microsoft cloud, Azure Open AI Service, Dynamics 365, Copilot for Microsoft 365 and GitHub Copilot into their Lumada Solutions to accelerate growth of the Lumada business, and improve productivity for their 270 thousand employees.
• Hitachi will train more than 50 thousand “GenAI Professionals” on advanced AI skills. As part of the partnership, Hitachi will incorporate training provided by Microsoft into Hitachi’s training.

Redmond, June 3 / Tokyo, June 4, 2024 – Hitachi, Ltd. (TSE:6501) and Microsoft Corporation announced a projected multi-billion dollar collaboration over the next three years, that will accelerate social innovation with generative AI. Through this strategic alliance, Hitachi will propel growth of the Lumada business, with a planned revenue of 2.65 trillion yen (18.9 billion USD)^*1 in FY2024, and will promote operational efficiency and productivity improvements for Hitachi Group’s 270 thousand employees.

Specifically, Hitachi will embed the Microsoft cloud, Azure Open AI Service, Dynamics 365, Copilot for Microsoft 365, and GitHub Copilot into Lumada solutions to provide innovative solutions for the energy, mobility and other industries to deliver better outcomes for businesses and society. In addition, the two companies will promote joint projects to address pressing business needs such as bolstering cloud services, enhancing security, and mitigating the environmental footprint of data centers, which have become an increasing area of focus with the growing use of generative AI.

“Hitachi has been driving transformation by applying AI across the Hitachi Group to improve productivity and will invest 300 billion yen（2.1 billion USD）*1 in GenAI to capture new growth opportunities in FY2024. Hitachi and Microsoft have already been working on a variety of co-creation projects including the development of next-generation digital solutions for the manufacturing and logistics fields^*2, and the development of a field-extended metaverse that runs on Microsoft Teams,” said Keiji Kojima, President and CEO of Hitachi. “Under this new agreement, we are excited to further accelerate social innovation by expanding our efforts to social infrastructure areas such as energy and mobility, and by applying generative AI, to improve the productivity of frontline workers, which will become even more important in the future. By combining our capabilities, we can help solve the issues faced by our customers and society, and contribute to a more sustainable future.”

“We are entering a new era of AI with the promise to deliver transformative business outcomes across every role and industry,” said Satya Nadella, Chairman and CEO, Microsoft. “Our expanded partnership with Hitachi will bring together the power of the Microsoft Cloud – including Microsoft Copilot – with Hitachi’s industry expertise to improve the productivity of 270,000 Hitachi employees and help address customers’ biggest challenges, including sustainability.”

Hitachi’s Business Transformation
Hitachi’s Generative AI Center^*3 and Microsoft will collaborate to improve operational efficiency and application development within the Hitachi Group by using Copilot for Microsoft 365 and GitHub Copilot. Hitachi will also use Azure OpenAI Service to enhance its customer service. As part of Hitachi’s group-wide transformation, Hitachi will combine Azure OpenAI Service and GitHub Copilot with its systems development expertise to maintain high quality and improve productivity for mission-critical system development. Hitachi’s internal validation confirmed that when its detailed system design knowledge was incorporated with Microsoft Azure OpenAI Service and GitHub Copilot, the application source code could be properly generated 70-90% of the time, resulting in high quality output.^*4

Hitachi Rail is leveraging GenAI for predictive maintenance, enhancing equipment monitoring and refining forecast accuracy. This proactive approach prevents breakdowns, increases service quality, reduces operating expenses, and augments safety. For example, a cloud-based platform on Microsoft Azure was utilized to streamline data visualization and analysis, empowered by AI to furnish data-driven insights to digitally monitor rail infrastructure. These insights were translated into actionable steps for Network Rail, enhancing decision-making for predictive maintenance of overhead lines.

Develop innovative digital solutions
Hitachi is enhancing its Lumada solutions by incorporating the capability of generative AI. As part pf the initiative, Hitachi has already started to use Microsoft’s Generative AI for JP1 Cloud Services, a SaaS version of JP1, its integrated operations management software with approximately 20 thousand customers. This will accelerate response times to address failures, and enable improved operational efficiencies for IT departments, financial and public institutions. In an internal verification test conducted earlier, Hitachi confirmed that the time required for the operator to make an initial response to an alert was reduced to approximately two-thirds by using generated AI to respond to the alert and displaying the source of the citation, such as a manual, that provided the basis for the response.

In addition to this, Hitachi and Microsoft will also support the energy transition with improved access to and strengthening of digital solutions for asset performance management, energy trading, and risk management to reduce downtime and increase profitability. Increased computing power and cloud infrastructure are both critical to scaling these applications. Hitachi Energy’s Enterprise Software Solutions technology and its partnership with Microsoft is key to optimizing the energy network, from generation, through transmission and distribution, and ultimately in delivering reliable and sustainable energy to customers.

Joint projects to promote sustainable growth
Multiple Hitachi Group Companies including GlobalLogic, Hitachi Digital Services, and Hitachi Solutions, deliver a wide range of digital engineering, IT & managed services, and application services for the cloud. Additional development efforts through this partnership will focus on enhancing this broad range of services with the aim of sustainable innovation with Microsoft.

As the impact of CO2 emissions from AI on the global environment increases, Hitachi and Microsoft will work toward zero carbon, starting with a data center project in Europe, to reduce environmental impact.

Strengthen digital skilling and talent development
Hitachi will train more than 50 thousand GenAI Professionals. As part of the partnership, Hitachi will incorporate training to acquire advanced software development skills using GitHub Copilot and Azure OpenAI Service into the program to develop GenAI Professional, talents who support customers’ transformation using AI.

About Hitachi, Ltd.
Hitachi drives Social Innovation Business, creating a sustainable society through the use of data and technology. We solve customers’ and society’s challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products. Hitachi operates under the 3 business sectors of “Digital Systems & Services” – supporting our customers’ digital transformation; “Green Energy & Mobility” – contributing to a decarbonized society through energy and railway systems, and “Connective Industries” – connecting products through digital technology to provide solutions in various industries. Driven by Digital, Green, and Innovation, we aim for growth through co-creation with our customers. The company’s revenues as 3 sectors for fiscal year 2023 (ended March 31, 2024) totaled 8,564.3 billion yen, with 573 consolidated subsidiaries and approximately 270,000 employees worldwide. For more information on Hitachi, please visit the company’s website at https://www.hitachi.com.

About Microsoft Corporation
Microsoft (Nasdaq “MSFT” @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers. The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more..

*1 Forecast as of April 26, 2024, calculated at 140 yen to the U.S. dollar.
*2 Hitachi News Release (June 26, 2020) “Hitachi and Microsoft form a strategic alliance to advance next-generation digital solutions for manufacturing and logistics across Southeast Asia, North America and Japan” https://www.hitachi.com/New/cnews/month/2020/06/200626.html
*3 Hitachi News Release (May 15, 2023) “Hitachi Establishes New ‘Generative AI Center’ to Accelerate Value Creation and Improve Productivity in the Lumada business by promoting the use of Generative AI” https://www.hitachi.com/New/cnews/month/2023/05/230515.html
*4 Hitachi News Release (May 21, 2024)“Hitachi to Accelerate System Development Transformation with Generative AI" https://www.hitachi.com/New/cnews/month/2024/05/240521.html

28 May 2024

Hitachi will use Gemini models and Vertex AI to help enterprises improve business performance

Santa Clara and Sunnyvale, California, May 28, and Tokyo, Japan, May 29, 2024 – Hitachi, Ltd. (TSE:6501), and Google Cloud today announced a multi-year partnership to accelerate enterprise innovation and productivity with generative AI. Hitachi will form a new business unit focused on helping businesses solve industry challenges with Gemini models, Vertex AI, and other cloud technologies, and it will also adopt Google Cloud’s AI to enhance its own products and services. Through the partnership, Hitachi will further accelerate growth of Lumada, its core digital business, and it will advance operational efficiencies for the Hitachi Group.

Led by GlobalLogic, a leader in digital engineering and a subsidiary of the Hitachi Group, the companies will establish the Hitachi Google Cloud Business Unit and the Google Cloud Center of Excellence (CoE) to rapidly scale Google Cloud technology to new and existing enterprise customers. Additionally, Hitachi will collaborate with Google Cloud to incorporate training on Google Cloud’s GenAI as part of Hitachi’s GenAI Professional training program. The program will deepen the expertise and managed services available through these business units, which will ensure large-scale organizations have access to the resources needed to fundamentally improve how they operate with AI. 

Additional focus areas of the partnership will include:

• New GenAI solutions for software modernization and customer service: Hitachi will use Gemini models to build solutions that help businesses efficiently modernize legacy software systems, and it will adopt Google Cloud Contact Center AI to power more effective and accurate customer service experiences. For instance, using Google Cloud Agent Assist, customer service representatives can be supported with real-time knowledge assistance and resolution suggestions to help them be more productive and provide better service. The new solutions will be compatible with GlobalLogic's Platform of Platforms architecture, which is designed to address the needs of intelligent enterprises. 
• Enabling safe, secure GenAI solutions for on-premises and cloud environments: Hitachi’s new solutions will support customers running both on-premises and in the cloud, enabling enterprises to modernize operations while retaining existing IT environments. The solutions will also be compatible with Virtual Storage Platform One, so that users can build GenAI applications using data stored on Hitachi Vantara’s hybrid cloud platform.
• Joint go-to-market initiatives: Hitachi and Google Cloud will better align their sales, marketing, and engineering teams to ensure that customers across industries have access to the resources needed to optimally deploy and manage GenAI projects through Hitachi Google Cloud Business Unit and Google Cloud CoE. This will include the GenAI Professionals that Hitachi trains on Google Cloud technology.
• Strengthen GenAI talent development: Hitachi’s GenAI Professionals play a critical role in supporting customers' transformation with AI, and Hitachi will train more than 50,000 GenAI Professionals through its global training program. As part of the program, Hitachi will include training on Google Cloud’s GenAI solutions and AI technology.

GlobalLogic and Google Cloud have collaborated for more than 15 years and helped empower enterprises with solutions that achieve their business objectives with efficiency and scale.

“Through this partnership, Hitachi will leverage Google Cloud's AI capabilities to improve and enhance employee productivity and accelerate innovation. By augmenting the capabilities of our developers and customer success units with Google Cloud GenAI solutions, such as Vertex AI and Gemini models, Hitachi will be able to better serve the needs of its customers in diverse industries and across complex domains such as energy, mobility, manufacturing and digital services,” said Toshiaki Tokunaga, Executive Vice President and Executive Officer at Hitachi. 

Nitesh Banga, CEO, Digital Engineering Business Unit, Hitachi, and President & CEO, GlobalLogic, added: “Through this global alliance, Hitachi is strategically aligning its go-to-market approach together with Google Cloud to drive tangible results. We are establishing clear pathways for collaboration, ensuring enhanced efficiency and acceleration in delivering solutions to our collective clients. This investment in building our Google Cloud Business Unit will provide the necessary energy, focus, and cohesive teamwork essential for achieving the desired accelerated time-to-market, translating innovation into swift revenue growth.”

“To solve complex business challenges with generative AI, enterprises need advanced technology and the technical expertise to successfully deploy it throughout their organizations,” said Thomas Kurian, CEO of Google Cloud. “Our partnership with Hitachi will provide customers with the resources needed to optimally build, implement, and manage every stage of their generative AI projects.” 

About Google Cloud 
Google Cloud is the new way to the cloud, providing AI, infrastructure, developer, data, security, and collaboration tools built for today and tomorrow. Google Cloud offers a powerful, fully integrated and optimized AI stack with its own planet-scale infrastructure, custom-built chips, generative AI models and development platform, as well as AI-powered applications, to help organizations transform. Customers in more than 200 countries and territories turn to Google Cloud as their trusted technology 

About Hitachi, Ltd. 
Hitachi drives Social Innovation Business, creating a sustainable society through the use of data and technology. We solve customers' and society's challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products. Hitachi operates under the 3 business sectors of “Digital Systems & Services” – supporting our customers’ digital transformation; “Green Energy & Mobility” – contributing to a decarbonized society through energy and railway systems, and “Connective Industries” – connecting products through digital technology to provide solutions in various industries. Driven by Digital, Green, and Innovation, we aim for growth through co-creation with our customers. The company’s revenues as 3 sectors for fiscal year 2023 (ended March 31, 2024) totaled 8,564.3 billion yen, with 573 consolidated subsidiaries and approximately 270,000 employees worldwide. For more information on Hitachi, please visit the company's website at https://www.hitachi.com

About GlobalLogic 
GlobalLogic (www.globallogic.com) is a leader in intelligent digital engineering. We help brands across the globe design and build innovative products, platforms, and digital experiences for the modern world. By integrating experience design, complex engineering, and data expertise—we help our clients imagine what’s possible and accelerate their transition into tomorrow’s digital businesses. Headquartered in Silicon Valley, GlobalLogic operates design studios and engineering centers around the world, extending our deep expertise to customers in the automotive, communications, financial services, healthcare and life sciences, manufacturing, media and entertainment, semiconductor, and technology industries. To learn more, visit www.globallogic.com. 

About Hitachi Vantara 
Hitachi Vantara is transforming the way data fuels innovation. Hitachi Vantara provides the data foundation the world's leading innovators rely on. Through data storage, infrastructure systems, cloud management and digital expertise, the company helps customers build the foundation for sustainable business growth. To learn more, visit www.hitachivantara.com.